Layers of money managers that don’t bear the brunt of losses but walk away with big payouts when things go well have turned the US economy to a type of “ersatz capitalism,” Joseph Stiglitz, Columbia University professor and Nobel laureate, told CNBC Tuesday.

“An awful lot of people are not managing their own money,” Stiglitz said. “In old-style 19th Century capitalism, I owned my company, I made a mistake, I bore the consequences.”

[efoods]“Today, (at) most of the big companies you have managers who, when things go well, walk off with a lot of money. When things go bad the shareholders bear the costs,” he said.

Even worse, those giving the money to the companies are entities like pension funds that are managing money on behalf of other people, so there are “layers and layers of agency costs,” Stiglitz said.